Vukile’s bid for Synergy Property Fund nearly done

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Vukile Property Fund CEO, Laurence Rapp says holders of the highly illiquid Synergy B linked unit, in particular, are responding favourably to the unique liquidity opportunity the offer. Vukile Property Fund CEO, Laurence Rapp says holders of the highly illiquid Synergy B linked unit, in particular, are responding favourably to the unique liquidity opportunity the offer.

After it had abandoned its takeover pursuit in September last year, Vukile Property Fund says it has successfully gained control of small-cap retail fund Synergy Property Fund.

In 2014, Vukile had taken a decision to abandone the deal because of shareholders unwillingness to engage due to share price performance.

Vukile CEO Laurence Rapp said on Tuesday the resounding positive reaction from investors underscores the offer’s sound strategy and pricing.

"Holders of the highly illiquid Synergy B linked unit, in particular, are responding favourably to the unique liquidity opportunity this offer represents for them,” he said.

Vukile, which initially acquired a 34% stake in Synergy in December 2013, said that its offer to acquire the Synergy shares it did not already own was successfully taken up by the market.

And the aggregate value of acquisition of control of Synergy is about R650 million.

It now holds over 75% of Synergy B linked units and around 55% of all Synergy voting securities.

This has effectively made Synergy a listed subsidiary of Vukile, signalling fresh consolidation for the listed property sector.

Synergy unit holders who had not yet responded to the offer still had until midday on Friday February 6 to do so.

Vukile is offering to acquire the remaining Synergy B linked units at a swap ratio of one Vukile linked unit for every 2.67 Synergy B linked units, and Synergy A linked units at a swap ratio of one Vukile linked unit for every 1.65 Synergy A linked units.

Commenting on the acquisition, Stanlib head of listed property, Keillen Ndlovu says we exchanged our Synergy A & B units for Vukile units.

"Vukile’ s income growth prospects going forward are expected to be relatively more attractive. Furthermore, we believe that Synergy’s retail assets would be a good strategic fit in Vukile’ s portfolio and also provide an additional benefit of providing better liquidity," he said.

He added: Vukile has a stronger balance sheet with better debt capacity which enables it to grow further if the need arises. "We believe that that the take-over will benefit both Vukile and Synergy shareholders," Ndlovu concluded.

At 12.14pm the Vukile counter was trading 0.36% firmer at R19.72 a share from a close of R19.65 on Monday.


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